It's been six years since the first insider trading bill was introduced in the House of Representatives, and two years since we began advocating for it. There are now 253 congressional co-sponsors of the bill, as well as a key Senate vote scheduled for later today, which will begin a broader debate by both houses.
We are hopeful about the prospects for the bill in the Senate, though its ultimate passage remains uncertain. Citizens must reach out to their senators and representatives in order to end congressional insider trading once and for all.
The ideal trade
When I sat down with Rep. Tim Walz, D-Minn., one of the sponsors of the House STOCK Act, I asked him to tell me what an ideal trade looks like. He answered immediately, "It's one that's reported. The sooner the better." Walz described trades that were searchable online, matched to year-end returns and profits, and cross-referenced to votes that went through the member's committee.
Walz pointed out that our team, which has spent the past several months working on this project nearly full-time, should have had most of this information at our fingertips. "It takes six professional journalists to find what my constituents should find in 10 minutes on a search of site," he said.
There's no reason that can't start today.
A clean slate
Our intention in supporting the STOCK Act is not to have our representatives fined or thrown in jail for trading. We believe that the stock market is the best way to build long-term wealth, and should be accessible to everyone.
So let's start fresh. Let's wipe the slate clean. Let's say to our representatives, "We don't care if you were trading on nonpublic information during the financial meltdown. You get a pass on everything until now. We're not going to judge on questions of morality for things that happened before. But from today, all bets are off."
Walz likes to compare trades to earmarks. Overwhelmed with how many requests he was receiving for funding, he placed them all on a website and asked his constituents to help share in the responsibility of selecting what projects should be funded. He said shortly after, the quantity of requests declined, while the quality increased. Transparency, he said, was the key.
So let's put it all out there and see what happens.
There are 253 co-sponsors. And you.
For several years, Representatives Walz and Slaughter were championing the STOCK Act to anyone who would listen. They were the lone voices in the halls of Congress. Fortunately, they've been joined by 251 colleagues and countless concerned citizens in supporting this bill.
That looks like the start of a powerful movement.
It doesn't especially matter that we're not members of Congress. It doesn't matter whether we trade regularly or not at all, whether we're close to retirement or just starting out. This is one issue that transcends political affiliations or how much money we make.
Passing the STOCK Act matters to all of us, because at some point, we have to feel as though we have a say in how our government is run. We have to feel that our representatives truly represent our best interests, that by making the easy decisions we can trust them to make the hard ones. We have to know, without a shadow of a doubt, that when they make those hard decisions, they won't also be trading defense stocks right before voting to go to war or not, or shorting education stocks in the midst of a debate over the future of school funding.
You can change how Congress trades
Today we are very close to declaring victory in the battle for the STOCK Act. But as always, we need your help. We ask that you contact your congressional representatives -- House and Senate -- and let them know that you support the STOCK Act. Call, email, tweet (hashtag: #PasstheSTOCKACT), post on their Facebook pages -- just send the message. Here's how to find their contact information:
While 253 sponsors is a great start, it's still just a start. Demand more. Demand accountability and transparency. Demand Congress stop trading on nonpublic information. Demand they pass the STOCK Act.
Demand it today.
Molly McCluskey is a Motley Fool contributor. The Motley Fool has a disclosure policy.